Americans are an odd lot. When times are good we completely forget what made them good. Within years of overcoming some great crisis we toss out all those things which rid us of it In short we as a nation have the collective attention span and memory of fruit flies grown fat from over ripe plums.
The latest example of this peculiar national quirk occurred last week when Silicone Valley Bank collapsed so quickly it took the breath away. It was a magic trick even more accomplished than those of Penn and Teller of Las Vegas fame. On Tuesday all that money was there, but by Thursday it had disappeared. Poof--all gone.
Of course one of the great advantages American bankers have is not only do the vast majority of Americans not understand the banking industry, but hell, we don't even want to understand it. All we know is we put the cash in and by God, when we want to we can get it out. The aversion to banking knowledge is so great, in fact, most of us would rather read the owner's manual of a riding lawn mower we don't own than bank regulations.
That doesn't mean we don't take notice when banks fall. Anything that rattles the financial stability of the nation does. This is especially true of us who have roots here in the middle of the country which reach back a few generations. Indeed, unless your family was extraordinarily lucky odds are someone a branch, or so over, in the family tree had a horror story, or two to tell about the great depression, bank foreclosures, failures, and lost savings.
In theory those days are gone now. Most of us are saved by the F.D.I.C. which was established by Franklin Roosevelt in order to prevent the average depositor from losing everything because some jughead in a suit screwed the pooch with your money.
Which brings us to the failure of Silicone Valley Bank. What the fuck happened? How did SVB come to this point of failing? As with anything these day it depends on who you ask.
Way back in 2008, under republican George W. Bush, the people who ran big banks went a little funny in the head and managed to blow an unimaginable pile of assets. Their failure was so monumental the entire nation seemed on the verge of a second great depression. This caused the feds to intervene in order to bail these institutions and the greed heads who ran them out.
After Barack H. Obama became president he pushed through some modest regulations which were designed to keep small and moderate size banks safe from idiots. You know, people who were willing to risk other people's money on sucker bets with odds so fantastical they made investing in the power ball drawing seem sane by comparison.
Conservatives and banking types from coast to coast moaned and groaned about the regulations. However, once Obama was gone and Donald J. Trump was in office they saw a chance to get rid of them. In 2018, after SVB CEO, Greg Becker, among others, lobbied hard for the regulations to be lifted Don Trump did just that.
Now if you listen to republicans, especially the hard core MAGAs, Trump's deregulation of banks--and railroad safety measures for that matter--have nothing to do with any recent disasters, financial, or environmental. According to Fox News talking heads SVB failed because it was a woke institution. In other words its board of directors was so busy promoting and investing in high risk liberal projects they forgot to watch the bottom line.
The outrageous charge steps over into surrealism when one realizes a chief venture capitalist associated with SVB is Peter Thiel. Brother Thiel is a MAGA supporter and contributor who has funneled millions into pro Trump political action committees over the years. Theil's involvement in the bank was so deep there are reports floating around which say his actions early in the week actually began the run which doomed the bank.
With all the mounting evidence showing their policies and guys fouled up, no wonder the rubes at Fox are invoking the woke boogie man. You have to divert attention away from the truth, right? In today's journalism that's what happens.
But hey, Fox News willingness to lie aside, in the final analysis the entire SVB mess has proven once again capitalism is far too fragile to be left in the hands of capitalists. They will fuck it up every time. Despite history, it is the lesson Americans never learn.
3-15-23
mcc
As anyone with a brain in their head knows, the honor system doesn't work, firm regulations do. The very ones who wish to do away with them are the ones who behave most irresponsibly.
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